What is the "True" value of your instrument?

[Pho6]

Hi,

I've been violin/bow shopping recently and I began to wonder, will the customer ever know the "true" value of the instrument/bow that they bought?

Stores will definitely put some sort of premium on the instrument, but as a customer unless we have the violin appraised elsewhere, we're never really going to know the true value.

I was looking at a violin couple months back and really liked the instrument (feel and tone), but the instrument was marked at $3500. This was over my budget. When I asked if the price could be lowered, the sales person punched some numbers on his calculator and very willingly knocked off $500. I personally felt that was a little too easy and probably could have brought it down more.

Similar story, I went back to the same store to buy a new violin bow. This Nickel Mounted Marco Raposo was labelled at $650. When I said it was over my $500 budget, the sales person punched in some numbers and brought it down to meet my $500 budget. Again, seemed too easy.

Is this a sign of 'good customer service'? Or the result of a significant markup in prices? This makes me wonder how much my "$3000" violin is really worth. Maybe it's only worth $2000 and they just pocketed $1000. Kind of depressing, but I might just get it appraised at another store some day just out of curiosity.

Anybody else have a similar experience? For people that own violin stores, is there a general "mark-up" (like 20%) on the actual value of instruments/bows?

[lyndon]

right now economic times are very tough for most stores, so even big, well establishesd shops are willing to discount, in good economic times, discounting is like walking into wal mart and asking for 20% off, its not going to happen, at least at some bigger stores.

[Polk]

In this case he got offered a 23% discount on the bow, which is pretty darn big! Sounds like those folks are way over pricing so they will get offers that fall down to around where the true prices are! I'd price those items on the web or at other stores before I bit.

[James M. Jones]

In general the markup from wholesale...is %100 that is they buy it for $50 sell it for$100 ...At first glance it sounds like a total rip...but when you consider holding the stock,insurance, building costs.staff.ect, it all adds up. The advantage is that you get to check out several instruments before buying,bring a friend, visit several days, play for an hour or more ,and there's even someone to come back to if problems develop..Oh yea, and if the guy needs a sale or likes you, he can give a heavy discount as well. Not so easy to do on the web.

[Jacob]

Whatever the case may be, I think that greater consistency in pricing is a better policy, and that "special deals" should be used to build long-term customer relations (trade-in incentives etc). I don't think a good reputation can be established by a violin-shop if it operates on the sales principles of a bazaar.

[Jeffrey Holmes]

Anybody else have a similar experience? For people that own violin stores, is there a general "mark-up" (like 20%) on the actual value of instruments/bows?

Guess it depends on what you mean by "20% mark-up". It also depends on what kind of store you're shopping with and what products you're looking at... like just about every industry in the world.

The antique market, especially the middle to high end, and the upper end contemporary market, is very different than the market for new student quality instruments (which is the market you described).

Let's do an admittedly over simplified look at the market segment you're working with:

In this market, in most cases, one has a manufacturer, who may or may not be the distributor, the shop and the consumer. Many/Most products that are branded (have a brand name that is universal with any shop that carries them) have some sort of suggested retail (as a guide), or go a step further and have a MAP price or something similar (basically a price below which the shop may not advertise the product). These guidelines are set in place to protect the retail shops that buy these goods for retail resale (from mass discounters) and to protect the perceived value of the products in the marketplace.

If the customer is standing in front of a salesperson in the shop, even the MAP agreement does not prevent bargaining a bit for a better price between the two of you. While these types of instruments and bows are relatively easily replaced commodities, what the store is willing to do will depend on many factors (what the store's overhead, including improvements to the raw product, is; Customer demand for the products; etc.).

The prices for branded products can be compared relatively easily these days using the internet or phone. Unbranded products (those that may be purchased as proprietary "brands" unique to the store or music company) are more difficult for the average consumer to gain realistic comparative prices for.

Sales history, for both new and used items, is really the only true test of "value", and then one must be careful to define what market you are speaking of (retail, private sale, auction sale, wholesale, etc.).

As far as "mark-up"; If a business is buying and reselling an item in this range, you can be relatively sure the "mark-up" is at least double the cost. Hard to make payroll and rent without a profit.

Just for comparison; Consignment terms (commission a person will pay a shop to resell an item), at least in the US, varies from as much as 30% for less expensive items, to around 20% for the middle market, and less for the top end.

Frankly (and I don't sell instruments in this category), my advice to customers looking at these sorts of instruments is to pick the shop first (a shop that adds value before the sale by correcting commercial setups, etc.), has a good reputation, has the capacity to service the instrument well and will stand behind it. A trade-in policy might be nice as too. I think these things are much more valuable than an initial "savings" of a few hundred dollars. In many cases, when considering the added value issues, the end cost could be much more without them.

Personally, in the end, it's the businesses that add value I'd like to see survive.

Hope that helps. I notice others have added comments while I was writing this... but all seem to fall in line.

[DGerald StephenR]

Jeffrey explained everything I had written in much better detail...

Edited October 24, 2012 by Gerald Stephen

[lyndon]

while jeffereys right, a 100% mark up above wholesale is an industry "standard", it really only a rough indication, if a shop really wants a product they might mark it up less than 100% to make it competitive, an the other hand many industries, not just violins are full of house "specials" that might even have a 300% markup, so when a shop buys chinese bows wholesale direct from china for $25ea, and sells it for $100, its not surprising theyre willing to knock $25 off the price as theyre still making a whopping $200% markup

in my case discounting can just mean im having trouble paying bills, cause im a small operation, but when a big shop is discounting heavily, its often an indication they have a really large mark up, and they dont really believe in the value of the full retail price theyre listing.

in an example of a shop that buys a bow for $50, retails for $100, but discounts to $75, if theyre doing that for everyone and everything in the store, theyre not going to stay in business very long, so short and simple the most likely answer to the OPs question, is yes, theyre willingness to discount probably indicates either theyre just plain stupid, desperate for quick cash, or presumably marking it up way more than 100% above what they pay for it IMO

[Addie]

As far as "mark-up"; If a business is buying and reselling an item in this range, you can be relatively sure the "mark-up" is at least double the cost. Hard to make payroll and rent without a profit.

January is a great time to ask for markdowns... when retailers focus on short-term income vs normal profit margin.

[jacobsaunders]

There is no such thing as "True Value"

[lyndon]

in america there is, jacob, we have or had "true value hardware stores" but dont expect a discount as theyre only full retail!!!

[mmmm]

It sounds like the OP is a little disappointed they got a discount. In my experience, in most good violin shops it's fairly standard to ask if they can lower the price. More times than not, in my experience, they usually do...maybe not by a lot, but by some. It depends if it's on consignment or if they own the instrument. If on consignment, they usually have an agreed upon range with the seller. If they own it, they may have more wriggle room. But getting $500 off a $3500 instrument sounds fairly normal to me, and very nice. If they were willing to sell it for $2000, then yes - it would be obvious it was overpriced to begin with. But you never asked, did you? It sounds like they did well by you - especially if you love the instrument!

On the other hand, if you are buying a contemporary instrument from a modern maker - I think it would be less advised to ask for a discount...

[jacobsaunders]

You are quite right Lyndon, of course,the americans have everything bigger and better!

For awkward Europeans, things get a little more complicated. One and the same instrument can and does have vastly varying “values†depending on the context. When writing expertise for the Austrian Law Courts they (most practically) have a precise guideline, which lists the 6 main different circumstances that determine the various values of one and the same object.

-Wholesale value,

-Retail value,

-Fair price between private individuals,

-Cash sale from private individual too a merchant,

-Value as bank collateral,

-Value when seized by a bailiff.

and explores the relative monatary proportions.

Probably the most interesting cognition one can draw, is that the overwhelming majority of the Maestronet public have the impression that they would have a birthright to the full retail value, although this is by the very kindest interpretation a very minimum of 30% too much.

[Violadamore]

IMHO true value (strictly talking money) is what you can sell it to somebody for. I think at least 3 experts would agree with me, but one hanged himself and two are in jail

Seriously, though, I think that is the bottom line, what it will sell for under realistic conditions. If you work at it, low end Chinese with case and cheap bow should bring $100 to $120 from someone if they sound any good at all, and antique German factory fiddles (the most common old violins you'll find) can be turned for $500 ready to play. That's my experience anyway, selling to folks at flea markets, events, and so on.. Anything above that should bring more, like if it's signed and numbered from a real maker, stuff like that i offer to music students at the local university. and players I know.

[Jeffrey Holmes]

For awkward Europeans, things get a little more complicated. One and the same instrument can and does have vastly varying “values” depending on the context. When writing expertise for the Austrian Law Courts they (most practically) have a precise guideline, which lists the 6 main different circumstances that determine the various values of one and the same object.

-Wholesale value,

-Retail value,

-Fair price between private individuals,

-Cash sale from private individual too a merchant,

-Value as bank collateral,

-Value when seized by a bailiff.

and explores the relative monatary proportions.

We also have several defined values & markets used when producing a proper appraisal here in the states (USPAP guidlines), which I hinted at in paragraph 7 of post #6. I'm sure many, if not all, are similar in approach to those you use... so I guess we are as awkward as you Europeans in that regard.

[nathan slobodkin]

Jeff seems to have covered this topic pretty well especially in his reference to" added value". I think that with older instruments and instruments which are set up by the seller there can be large differences in value due to differences in playability and selection of superior examples of what are nominally the same instruments. I think that the buyer should be very wary however of instruments without labels or with modern stuff that has labels saying made for a particular shop as it is sometimes very hard even for knowladgable people to compare these with other instruments. I have seen violins which are sold under these labels to go for three times the price of the exact same thing sold with the makers name.

[martin swan]

While I agree entirely that shops have justifiable overheads that an online dealer such as myself doesn't have, it would seem that in the UK it's common practice for shops to mark up their stock by absurd amounts - in the trade this is justified as a mechanism by which these shops can "offer trade-ins" ie. pretend to offer people a nice amount of money for their unwanted instruments while actually acquiring them for nothing. And then there's the matter of backhanders to teachers .... have I gone too far?

Some buyers have the sense to ask for massive discounts (which they get) - others don't realize this is the game and end up paying far too much.

As one example among many, a friend recently fell in love with a violin by a late 18th century Viennese maker, for sale in the grandest of London shops. The price (on application only) was a patently absurd £30,000, which he was about to pay since it was exactly what he'd been left by a deceased relative. I suggested that this was "a rip-off" and that he might get it for half that amount - he offered £22,000 and this offer was immediately accepted. I think a much lower offer would also have been accepted .....

Personally I find this very disturbing - I hope (probably in vain) that greater access to information online, auction results etc will lead to more realistic/ethical pricing, but since the vast majority of shops refuse to give prices on their websites it's hard to see how this will happen.

This lack of clear pricing would in itself seem to me to be cause for concern, and I haven't seen parallels in any other trade.

Taking a deep breath and hitting "Post" ...

[Jeffrey Holmes]

Personally I find this very disturbing - I hope (probably in vain) that greater access to information online, auction results etc will lead to more realistic/ethical pricing, but since the vast majority of shops refuse to give prices on their websites it's hard to see how this will happen.

This lack of clear pricing would in itself seem to me to be cause for concern, and I haven't seen parallels in any other trade.

Taking a deep breath and hitting "Post" ...

Hi Martin;

I personally didn't go to the segment of the market you are addressing (see post #6) as I didn't believe that was the part of the market the OP was referring to... and the old instrument market has it's own challenges... but if you all want to go down that road, it's OK by me. No need for a deep breath.

[martin swan]

Hi Jeffrey,

I agreed entirely with what you had to say about mark-ups on "student" items, by which I suppose we mean items that shops acquire from wholesalers with relatively fixed prices

My concern about pricing in other parts of the business isn't purely in relation to old instruments.

A well known modern maker might quote a price of £50,000 for a violin but be wiling to sell the instrument for under £35,000. This same maker might struggle to sell at auction for £10,000. This would seem to be stretching things a bit, and applying the dubious standards of the antique violin trade to modern instruments .....

[Jeffrey Holmes]

Hi Martin;

Sorry in advance for my abbreviated reply. I have a full day...

In the scenario you mentioned; Are you speaking of a contemporary maker who may not have a realistic view of where they sit in the marketplace; demand doesn't support their pricing? If so, this happens within almost every industry I can think of.

In my experience, the vast majority established makers who have earned their place are very careful to support their pricing. When handling top tier contemporary instruments for makers, most state they prefer "no retail discount". The maker with largest notable exception is a bow maker who allows 5% (my discretion), but I've been working with that person for nearly 30 years. These rather stiff retailing policies on instruments and bows that have proved their place work well for maker, customer and retailer, in my opinion. They provide stability.

Mixing the auction market and retail market, especially for contemporary items, can be a bit confusing and will take more time than I have this morning to present my views... so I'll not comment further on that at this point.

[jacobsaunders]

While I agree entirely that shops have justifiable overheads that an online dealer such as myself doesn't have, it would seem that in the UK it's common practice for shops to mark up their stock by absurd amounts -

Taking a deep breath and hitting "Post" ...

Kind of object to your insinuation that online dealers "such as yourself" (#17) are cheaper than shops. This has no basis in fact.

drip, drip, drip

[~ Ben Conover]

Jeffrey raises a very good point, keeping prices consistent.

As soon as a maker drops or raises his prices, it confuses and puts other people off.

It's much easier for the maker to say, 'oh my violins cost X', and just stick to that.

I'd agree with Martin, it's obvious that an online shop has less over heads than a posh place in central London with very high rents. Especially if comparing Hungarian and Chinese stuff to the well known independant makers.

A good shop will charge 40% markup.

My only concern with selling through posh shops would be the artificial prices they have to sell at in order to cover themselves,

it makes buyers think the modern instruments are more expensive tahn they really are. If the shop keeps the prices down, then the maker gets 40% less.....so the advantage of going through a shop is really just the apparent prestige of being represented by that shop. Most London shops already have a very full stock of regular makers who they represent.

If all things being equal, and all violins being fairly similar with very few outstanding examples even at the high end,

then the true value of a modern instrument ultimately lies in the buyer's wallet, and the market prices.

The maker has to decide which market he is going to target, it's who you know, sadly.

[Brad Dorsey]

On 10/24/2012 at 4:53 PM, jacobsaunders said:

There is no such thing as "True Value"

Jacob is generally correct here. If you're trying to sell something -- a violin, for example --, the value is whatever you can get for it or whatever you're willing to sell it for. If you want to buy something, the value is whatever you can get it for or whatever you're willing to pay for it. The value of something when you buy it can be quite different from the value when you sell it. And different people attach different values to the same object.

An exception to this would be for items that are traded in national and international markets. It is pretty easy to determine the true value of things like gold, crude oil or shares of stock.

[Bernie R]

The true value of my instrument for me is the cost of replacement.

I bought my fiddle from Martin Swan for a very modest sum in violin terms, perhaps what one would expect to play for a good "student" instrument in a shop. I bought it because of its sound and playability. Many other people, including professional violinists and luthiers, have admired it. When other fiddlers hear me playing it they want to try it, and they always say "what a nice fiddle".

It also looks good and it is a small model which suits me, practically and aesthetically.

I wouldn't know where to get another one that sounds, plays and looks as good as this one and which I could afford to buy, so for me it is effectively of infinite value, and it's the possession I would want to rescue first from a fire.

[David Burgess]

A well known modern maker might quote a price of £50,000 for a violin but be wiling to sell the instrument for under £35,000. This same maker might struggle to sell at auction for £10,000. This would seem to be stretching things a bit, and applying the dubious standards of the antique violin trade to modern instruments .....

I think auctions are still pretty risky for most musicians. I don't run across many who are prepared to spend many thousands of dollars on a "personal instrument" after playing an instrument or bow for 15 minutes or so (if at all), and without being able to take it out on approval to give it a real workout in various environments, get feedback from colleauges, and maybe even get a second opinion on authenticity and condition. If they're willing to take on those risks, it would need to come with enough of a price break to make the risks worthwhile.

Dealers buy instruments anticipating that there is potential for profit, after expenses associated with resale, fixing up, holding in inventory, and having of their own money tied up until it sells. They too are taking on some risks associated with authenticity, condition, how good they can make it sound, whether they can hook that sound up with a buyer, and whether they might need to take it back in trade someday.

Those things considered, I think there will generally be some pretty good price spreads between auction prices and retail prices, and that these are understandable. There are exceptions of course.